Facebook takes another shot at settling privacy lawsuit

SAN FRANCISCO (Reuters) - A U.S. judge said he would consider whether to preliminarily approve Facebook’s second attempt to settle allegations the social networking company violated privacy rights.

Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012. REUTERS/Valentin Flauraud

Earlier this year, U.S. District Judge Richard Seeborg rejected a proposed class action settlement over Facebook’s ‘Sponsored Stories’ advertising feature. But at a hearing on Thursday in San Francisco federal court, Seeborg was much less critical of a revised proposal and promised a ruling “very shortly.”

Five Facebook Inc members filed a lawsuit seeking class-action status against the social networking site, saying its Sponsored Stories feature violated California law by publicizing users’ “likes” of certain advertisers without paying them or giving them a way to opt out. The case involved over 100 million potential class members.

As part of a proposed settlement reached earlier this year, Facebook agreed to allow members more control over how their personal information is used. Facebook also agreed to pay $10 million for legal fees and $10 million to charity, according to court documents.

However, Seeborg rejected the proposed deal in August, questioning why it did not award any money to members.

In a revised proposal, Facebook and plaintiff lawyers said users now could claim a cash payment of up to $10 each to be paid from a $20 million total settlement fund. Any money remaining would then go to charity.

The company also said it would engineer a new tool to enable users to view any content that might have been displayed in Sponsored Stories and then opt out if they desire, the court document says.

In court on Thursday, Facebook attorney Michael Rhodes said the settlement provided meaningful protections and that Seeborg’s job was to ensure a fair settlement - not write national privacy policy.